Concentrated costs and diffuse benefitsOne of the most challenging aspects to public budgeting of any sort is that there two different ways to split the bill for expenses -- concentrate them or spread them out -- and the things government spends money on can have benefits that are again either concentrated or diffused throughout the population. Things like the Air Force have both diffuse benefits and diffuse costs -- everyone benefits relatively equally, and everyone pitches in via income taxes. There isn't a lot of debate about those issues. Then there are things with concentrated benefits, which cause a huge number of our problems, especially when they have diffuse costs: There's always a good reason for the people who benefit to lobby heavily for everyone else to pay for the things they want, and that's why we get earmarks. (It's also why we get things like the National Endowment for the Arts -- the people who want it most are the artists it supports [a really concentrated benefit], and they argue that by spreading out the cost among everyone, the per-capita cost is next to nothing. Sure, there are lots of talking points about why the spending benefits everyone, but the reality is that the benefits are extremely concentrated among the actual recipients.) But things get really challenging when a situation arises like the one going on in Omaha right now, where the city faces a huge bill ($3 billion, perhaps) to separate its stormwater sewers from its sanitary sewers. It's a project with no real lobby -- the benefits are about as diffuse as they could possibly be, and nobody really notices their sewers unless they're fighting backups. The project has been mandated by the Federal government, so Omaha doesn't have a choice whether or when to do it. They have to spend money, starting now. But there are certain industries that use more water (and thus produce more sewage) than others, and a group of 19 of those companies is fighting a plan to make them pay 5% of the overall bill. Their argument in response is that there's no way to absorb those costs without cuts elsewhere -- or even, possibly, closures. There's no way to escape the fact that the project is going to be expensive and that someone will have to foot the bill. And, unfortuantely, it's not the kind of project that counts as "sexy" in any way, shape, or form, so there's really not even a way for anyone to find a political solution that will look good when re-election time comes around.

Stock-trading company causes its own miniature "flash crash"One can see exactly how we got ourselves into the situation we're in today -- where a handful of companies with privilege and access are able to use computers to conduct instantaneous automated stock trades. And though none of the individual steps seems to have been wrong, the result is a real mess. And it's one in which those privileged firms try to convince themselves and the world that they're doing something of value by making stock markets more liquid. But liquidity itself isn't necessarily a good thing. If a plane crashed on a deserted island with 100 survivors, would anyone think it would serve any useful purpose to have ten of those survivors spend all day running back and forth, trading coconuts for seashells in order to ensure a "liquid market" for each?
■ The whole notion of high-frequency trading is based upon the notion of making lots of money by trading huge volumes of stock shares for very small profits. Hence algorithmic trading accounts for more than 60% of stock-market activity. But the whole notion is a total fallacy. Warren Buffett didn't get wealthy by swapping shares of stock all day for pennies a share. Real investing calls for discovering the real value (the so-called "intrinsic value") of a company, in terms of what it possesses and what it has the potential to create, and then acquiring a portion of ownership in that company when someone else is willing to sell it for a price below that intrinsic value. And because intrinsic value can only be estimated in very rough figures -- particularly because it involves making estimates ten years into the future -- one can only do it right by being extremely conservative and taking action only when the gap between the intrinsic value and the market price is big. It's practically the polar opposite of high-frequency trading.

How could Apple use its $117 billion in cash?New York Times business reporter Andrew Ross Sorkin suggests acquisitions from Nuance (makers of voice-recognition software) to Twitter to RIM to Sprint. There's no doubt the company is on a profitable roll right now -- bringing in $9 billion from the start of April to the end of June. Interestingly, with $112 billion in shareholders' equity, the company already has $89 billion in "long-term marketable securities". In other words, Apple is behaving like a gigantic mutual fund that happens to have a $3-billion-a-month inflow. (Sorkin's $117 billion figure is the sum of the company's cash, short-term marketable securities, and long-term marketable securities.)

Senate takes summer break without approving cybersecurity billThat may be a good thing -- the Federal government has already made it clear it demands broad powers in case of a meaningful cyber-attack, and there are reasonable concerns that the bill as proposed would violate our expectations of privacy. The bill, called the Cybersecurity Act of 2012, does address an important matter -- cyber-attacks could be dreadful if carried out by an effective and motivated party. But we're talking about the same Federal government that failed to anticipate the means and methods of the 9/11 attacks, and couldn't respond quickly enough on that day to scramble armed fighters to protect the White House. In other words, their ability to anticipate threats and prepare appropriately is doubtful. Considering the speed at which Internet technologies change and evolve, it's hard to believe that a great deal of codification will make us safer. What might, on the other hand, is if insurance carriers were to start imposing real dollars-and-cents costs on companies that need coverage but that haven't initiated adequate cybersecurity protections.

We need a word other than "rich"A Tumblr account re-posts pictures posted on Instagram of young people flaunting their spending. The name of the blog is "Rich Kids of Instagram", and that's probably the name most people would give it anyway. But there's something a little wrong about that title. "Rich" is one thing..."spoiled" is another. But then again, there are children in families with little or no money that are still spoiled rotten. "Overprivileged" just sounds whiny, but "wealthy" isn't the right word, either -- especially because the people who really get and stay rich from generation to generation aren't out blowing money on Ferraris for their children or $14,000 bar tabs. And they definitely aren't bragging about it on Twitter and Instagram. That's just short-term conspicuous consumption.

Is sports photography a dying art?Great photos will continue to be produced, no doubt. But one has to wonder whether there will long be a point to having photographers even bother to try capturing still images. As HD video recording becomes easier to perform with ever-smaller cameras, won't we likely reach a point -- soon -- when someone can simply carry a camera, set it to snap pictures at a rate approaching that of video, and simply go back and take still frames from the video? Naturally, there will be matters of exposure time and shutter time to adjust and tweak, but photographers already routinely set their cameras to take multiple shots in a "machine-gun"/continuous/burst mode. Aren't we getting quite close to the time when that burst mode becomes virtually continuous...all the time? The point here being that perhaps in the next era, what matters won't be the ability to take the perfect action shot, so much as to be able to pick it out.

Wishing just doesn't make it soEconomist Greg Mankiw points out that in the White House's latest review of the Federal budget, some assumptions are made about the future growth of the economy. That's fine -- we all have to make assumptions about the future. But those assumptions presently being made are pretty astonishingly rosy -- including guesses at 4.0% real economic growth in 2014, 4.2% in 2015, 3.9% in 2016, and 3.8% in 2017, before apparently settling into a long-term stable rate of 2.5%. But Mankiw notes that those estimates for 2014 through 2016 are each about a percentage point higher than what private-sector economists are anticipating. But that's not like being 1% different -- it's like being 25% different.
■ The government has a reason to hope for those higher rates of growth, since they mean Americans will pay more in income taxes, which in turn makes long-term estimates of Federal deficits look smaller. But the private-sector economists don't have the same incentive to guess high. For many of them, getting their estimates wrong means giving bad advice to businesses and investors, who can then punish them for being wrong by firing them.
■ For an idea of just how rosy the White House estimates really are, the history of GDP growth in America shows that the last time we could expect average growth rates to top 4% was back in the 1960s. Growth rates are much milder than that today. (In fact, they've been between -3.1% and +2.4% over the last four years. Nowhere close to 4%.) No doubt we'd love to see them go back up to 4% or even 5%, if we could make that happen consistently...but wishing just doesn't make it so.
■ Real growth is going to come from much higher labor productivity and much better technology -- and given that labor productivity growth seems to be stuck around 2%, that's about as fast as we should expect to see the economy grow, barring a sudden explosion of cheap robots.

Promises of transparency go up in smokeThe much-vaunted promises of government transparency and openness under an Obama administration have turned out to be false, says a Washington Post analysis. They conclude that 10 out of 15 Cabinet-level departments are even less likely to hand over requested information now than they were two years ago.

Microsoft rolls out Outlook.com to replace HotmailPeople can continue to use their old Hotmail addresses, change them, or tack-on new Outlook.com accounts as additional addresses. The new user interface is a lot cleaner than Hotmail ever was (in fact, it's almost too clean -- it's such a blank slate that it takes a moment to get oriented), and they've built in a very useful editor for Microsoft Office documents. It's really quite good.

Amazon sells more e-books than printed copiesIt's a global pheonomenon -- in Britain, the ratio of e-books to printed books sold on Amazon is now 114 to 100. In the US, e-book sales eclipsed printed copies last May. Young children may very well grow up to have peculiar understandings of what "books" are and do and look like, especially if they grow up in households that have gone all-digital.

Cedar River falls to 3' near the Palo nuclear power plantThe Catch-22 to the situation is that power plants need more water when it's hot outside, because that's when people use more energy (for air conditioning). But the same hot weather has reduced the supply of essential cooling water available in the rivers.

Why didn't we celebrate July 31st?July 31st should have been an international holiday to celebrate the centennial of the birth of Milton Friedman. His influence on economics -- really, the establishment of the Chicago School of economic thought -- and of the public's understanding of economics should not be understated. In short, the Chicago School can be said to assume that liberty has value unto itself and that government should be powerful where needed but aggressively limited in its reach. Metaphorically, a powerful referee is needed to ensure that games are played according to the mutually-agreed rules, but the referee shouldn't himself be a player.

Depending on who's doing the estimating, America has a shortfall of 20,000 to 200,000 truck driversIf the shortage persists, it's going to cause transportation costs to rise. Couple that with the inevitable impact on food prices that will result from this year's drought, 2013 could be an expensive year. The shortfall in drivers is one reason why one should expect trucking companies to be among the very first in line to demand the technology for self-driving vehicles. If one driver could operate more than one truck (operating in a semi-automated convoy), the trucking companies are going to be interested in making that investment.

Investment dollars are leaving China, fastThat signals a couple of things at once: First, that people within China see greater opportunities outside their country than within it. But it's also a sign of what happens when other countries spend too much of their money buying other countries' stuff: Eventually, the net-exporter nations end up trading that cash back to the net-importer nations, in exchange for the property the net-importers own. It's a curious kind of takeover.
■ More evidence that investment money from developing markets is going to come towards the West: High dividend yields from stocks in "emerging markets". This condition is a sign that the companies in those countries can't find enough promising investments of their own at home in order to justify hanging on to those profits. Business value always comes back to earnings: If a company is making money, it can either reinvest in itself or send the cash back to the shareholders in the form of dividends.
■ A company that sees limitless potential for positive returns ahead might retain all of its earnings -- as does Berkshire Hathaway. In the hands of a truly gifted investor like Warren Buffett, that's good for all of the owners. (In his words, "Unrestricted earnings should be retained only when there is a reasonable prospect ... that for every dollar retained by the corporation, at least one dollar of market value will be created for owners.") Other companies retain lots of earnings and then spend those retained earnings stupidly on foolish acquisitions and capital expansions. Other companies send the money back to shareholders through dividends, or indirectly through share repurchases. There's a time and a place for each of these strategies -- retention/reinvestment, dividends, and buybacks.
■ But high dividend yields tend to be a sign that management can't find much better to do with the profits. It's an intriguing notion that emerging-markets companies don't see enough opportunities ahead to merit retaining those earnings. And it means more cash in the hands of their investors to pursue companies in the United States and elsewhere.

Google tweaks search formula to punish copyright abusersHypothetically, the lower a site appears in the search results, the less money it can make from advertising. And since most of the copyright abuse out there is done to attract pageviews strictly for the purposes of gaining ad dollars.

It's not a laser, it's a maserMicrowaves, not light, can be concentrated and used for purposes where light cannot pass. That could include body scanners -- which could mean a lot of early detection of health problems. The maser has been around for over half a century, but a recent development has put it back in the news, because it could be going from high-specialty item to widespread application and use.

Midwestern bankers are pessimistic about farm incomesThe serious hit to crop and livestock production caused by the enormous and severe drought all over the Midwest this year has bankers expecting much lower farm incomes, which in turn is going to do some damage to economies on a local scale. If farmers aren't effectively importing lots of cash from elsewhere in exchange for their crops and animals, there simply isn't going to be as much cash to exchange around the communities where they live. Credit unions are worried that the harm done to farm incomes might offset the improvement that had been seen among other parts of the private sector.

Things get hot when heatedA woman is suing the Dallas Cowboys because she got third-degree burns from sitting on a black-colored bench in the sun. Burns which she apparently didn't discover until she stood up after some time parked on bench. Anyone who's too dumb to anticipate that a bench like that might get hot, and who then fails to notice third-degree burns for some extended period of time, is apparently someone who shouldn't be allowed outside a bubble without supervision.

Factory-direct furniture (when the factory is a prison)Prison industries may count as a necessary evil: It's probably far better for society as a whole for inmates to have jobs while they're locked up, since that helps them develop job skills and gives them something positive to do and focus upon while on the inside. That certainly has to make the guards happier and safer, too. But it certainly seems like prison industries would have to be watched extremely closely to prevent their abuse by people in authority. And who would want to be a private-sector manufacturer paying market wages in competition with a prison industry?

Take two minutes for a self-exam todayTake a minute or two and conduct some basic self-screenings for cancer. Early detection saves lives. There's lots of misinformation about cancer that finds its way around the Internet, largely because we've been trained to wait expectantly for some sort of magic-bullet solution to cancer. But cancer risks can be significantly reduced through a balanced diet, exercise, and early detection and treatment. Meanwhile, science is making great progress towards improving genetic detection, which holds great promise for some types of cancer. Instead of forwarding hoax-ridden e-mails about "cancer cures" and false threats, people should instead remind their friends and family to assess their health once a month.

Despite drought, Iowa farmland prices are still shooting higherThe average increase has been 24% over the last 12 months. That's decidedly unsustainable. Short-term, it's going to make farmers feel wealthier. Long-term, it could not only be an obstacle to young people becoming farmers, but could also threaten a serious hangover when the prices come back down again.

"Area man regrets investing in Facebook"The Onion's spoof has Mark Zuckerberg saying, "[T]here’s not a whole lot of room for long-term growth there, or any real solid plan for the future". It's funny because it's true.

Electronic medical records with a real purposeIBM's Watson supercomputer is being used to analyze patient records and improve medicine at Memorial Sloan-Kettering Cancer Center in New York. This is exactly the kind of thing for which better computing power should be used. IBM has obviously found a partnership from which to start. It would seem obvious that companies like Google, Apple, and Microsoft -- all drowning in cash and packed to the gills with smart people and high technology -- should be looking for problems like these, where they have competitive advantages and can establish profitable new divisions that don't depend upon advertising revenues for their success.

A Federal deficit of 7.3% of the entire economyLook: We can deficit-spend from year to year, but only at something less than the rate at which the economy is growing. If you know you're going to make $50,000 this year and $55,000 next year, then if you can borrow the money at something close to a 0% interest rate (which the Federal government can do right now), then spending $52,000 isn't really a crisis -- the deficit is more than made-up by a rising income. But the economy isn't growing at 7.3% a year -- not even close to it. And every year we overspend at a rate that much more than how fast we grow, we just make the future pain many times worse.

Pale skin as a sign of high statusFull-body beachwear -- in the form of the "facekini" -- is finding its way to popularity in China, where a lack of pigment suggests one has risen above field work. Of course, in the US, a tan suggests that the person has enough money to afford leisure time to sit in the sun. Unless it's a farmer tan.

Rule #1: Don't get caught in stupid photographs or videosIn case Prince Harry and others haven't noticed, this is the Internet age, which means a photo can be disseminated all over the world faster than most of us can find a postage stamp. This means two things: One, we're all going to find ourselves in compromising or unflattering pictures once in a while, and as a result, we're all going to have to become a little more forgiving and a little less judgmental about the mistakes of others if we expect the same for ourselves. Two, anyone with a reasonable endowment of brainpower will avoid getting into stupid situations when cameras are in the immediate vicinity. Getting naked during a game of pool is probably a bad idea for anyone, but most especially for one of the most recognizable celebrities in all of Britain.

The Onion: "College newspaper endorses Barack Obama"Sure, it's funny because it's practically a foregone conclusion on campuses across the nation. But we really ought to ask an important question: What major achievements of the present administration can be accounted-for without transfer payments? In other words, what can the Obama administration really say it has done that hasn't come back to taking money from one set of taxpayers and giving that money to a different class of voters? Certainly, the White House is not without some credits: Secretary of State Hillary Clinton seems to have been doing a stellar job of managing American diplomacy, and it was probably time to get rid of "Don't ask, don't tell" in the military. But the health-care "reform" act remains a mystery even to many of the people who voted for it in Congress, and there's really no way to justify proposals like aggressive forgiveness for student debts without acknowledging that such proposals either explicitly or implicitly punish some people in order to offer a "freebie" to others. The same goes for the huge breaks given to first-time homebuyers. And it would be perfectly rational for a person to take these free things, and there's a natural human instinct to want to reciprocate the apparent generosity (that is, to vote for the candidate who "gave" the voter something). But it's a misplaced reciprocity, since the government has no money of its own -- just the money it collects from taxpayers and then uses.

Jimmy Kimmel gets the "Nightline" timeslot in JanuaryKimmel is funnier than Leno and Letterman, so it'll make for a decent bout of competition, but Jimmy Fallon and Craig Ferguson are really the two to watch. Note, though, to the Washington Post: Saying that Conan O'Brien was "too young and too hip for flyover country" is pretty offensive. It's rude to call the rest of the nation "flyover country" to begin with, and to suggest that a bunch of rubes out in the sticks brought down Conan O'Brien is absurd. First off, NBC treated him unfairly. Second off, to blame the rest of the country for a show's failure is mathematically ignorant. The top ten television markets in the US contain 34,253,110 "TV homes" out of 115,905,450 in the entire country. That's 29.6% of the total. Nobody can blame Davenport, Iowa, (market #99, with 309,800 TV households) for bringing down an entire show. Being a regional snob may be self-satisfying, but it's not adequate journalism.

Ocean-bound floating citiesPractical or even plausible? Generally not. But they're fun eye candy. Humanity will definitely need to come to better terms with the oceans and how to live on and with them than we do today, but the major conceit to most "floating city ideas" is that there are millions of people aching to live in highly communal, closed societies. There just aren't. The incredibly few people who choose today to live aboard residential cruise ships are a strange breed indeed.

Good idea: Personal, portable savings accounts for old-age useThe sooner we all realize (a) that the government isn't any better at managing people's long-term savings than individuals are, (b) that people aren't likely to save enough for old age without some kind of mandatory savings requirement, and (c) that the Social Security system is anything but an adequate system for old-age savings (considering that it's underfunded, over-extended, and doesn't allow the individual to pass along anything to his or her heirs), the sooner we'll start to get on-board with some plans that are realistic for the future. America's personal savings rate is just 4.2% right now. That's not even close to what it should be.

Whooping cough cases are on the riseDramatically so. And almost undoubtedly due to the fact that there are too many people who consciously avoid vaccinations. They put their own lives at risk and threaten others by doing so. Not every vaccine creates immunity -- just like not every aspirin cures a headache. But we all benefit from herd immunity. The more of us who are vaccinated, the fewer of us are exposed to the risk of contagious diseases.

"The Libertarian Party is a great concept [...] but it got too far off the deep end, and so I dropped out"David Koch's comments on the GOP and the Libertarian Party show that he isn't the one-dimensional money machine that his political opponents make him out to be. The sooner America's left wing makes peace with the idea that markets are natural forces (with which we must work constructively) and the sooner America's right wing makes peace with the fact that social standards have opened up on a large number of issues (and that as moves the society, so must move the laws), the better off we'll all be.